With the MCO back up to -4 near the zero line and NYAD still under its 19 and 39 emas and the McSum making lower highs and marginally lower lows, I wonder if this is a good shorting opportunity looking for the final price lows next week or into the first week in Sept, possibly with a nice bullish divergence on the MCO to provide the foundation for the next rally. So far the rally this past week looks corrective to me.

Or instead can we get yet another straight line move up to new highs like we did in the last week of June and into July, blasting the MCO straight through the zero line and on up.

To me, the current technical configuration looks more like that we had back on June 18th with the snapback of the MCO to -4 and then the a swift drop for 4 days in the bottom.

At the highs this morning, NYAD was touching its 19ema but couldn't surpass it and faded downward. I'd say there is a decent chance that tomorrow we get the final reflex rally to get the MCO to or above the zero line before this corrective action takes a break, just to keep everyone on their toes, lol.

It was not to be, and the reflex rally is over. Without substantial reversal back up today, the NY AD McSum will drop below the traditional -250 bull market support level. That does not support the bull case at this juncture.

Three things of note. We have a very nice bullish MCO divergence potential here for the short term. Secondly, also for the short term, SPX bounced off its UTL from the Nov lows this morning. Third, we finally got the high TRIN day I have been looking for the down cycle that we had not gotten. Let's see how far the bulls can run with it on the short term.

"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

"You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977

* the daily NYHL 10-period EMA resides at the Negative 3.55 level which is slightly below the Bearish confirmation red line drawn at the Zero level

conclusion: whether you have a Short or a Long trading bias ... the appropriate risk management action is vigilance for a future continued hold below the Zero level, OR an eventual upside reversal by the daily NYHL that actually holds above the Zero level for a sustained period of time, possibly into the 2013 year-end

for those that care about such considerations, there is a near-term opportunity risk to be assessed using this data set

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Being honest may not get you a lot of friends, but it'll always get you the right ones. - John Lennon

* the NYAD 8-day trend = Negative 66 ... not so bad considering the price damage which has taken place since August 2nd, and considering the overall declining trend by the cumulative and daily NYAD and NYUD since late July

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Being honest may not get you a lot of friends, but it'll always get you the right ones. - John Lennon

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